Precious Metals Preview:
Gold stayed supported as a break above $1900 extended. The metal quotes at $1922 per ounce, up 0.38% on the day. MCX Gold closed up 0.45% at Rs 50913 per 10 grams. US stocks recovered after the correction seen on Monday as market focussed on fresh aid package to bolster the economic recovery. The World Gold Council (WGC) noted in a survey that Russian investors believe gold offers security. Gold is seen as an effective store of value. Most Russian investors believe it holds its long-term value and protects against currency and inflation fluctuations. Two thirds of them say that it evokes feelings of long-term security. Gold is not currently considered a mainstream investment among Russia. But there is a significant conversion opportunity, says WGC. Around 68% of the survey participants noted that Gold is a good safeguard against inflation/currency fluctuations.
Base Metals Preview:
Copper soared to near five month high on COMEX as equities edged up in US and traders focussed on supportive cues from China. The red metal jumped around 2% to hit $3.17 per pound. MCX Copper rose 0.14% to end at Rs 531.20 per kg. China’s central bank kept its benchmark lending rates unchanged for the sixth consecutive month today. The one-year loan prime rate was retained at 3.85% and the five-year loan prime rate was maintained at 4.65%. The one-year and five-year loan prime rates were last cut in April. The one-year loan prime rate was lowered by 20 basis points and five-year rate by 10 basis points in April. Economic data has been optimistic for the Chinese economy recently after a torrid first few months as Covid-19 wreaked havoc and crippled the business and consumer sentiments.
Crude oil jumped in last session with steady buying emerged in WTI futures above the break of $41 per barrel. The commodity hit a seven week high of $41.88 per barrel. MCX Crude ended up 1% at Rs 3050 per barrel. However, oil slipped in Asia today on broad demand worries and trades at $41.48 per barrel, down 0.53% on the day. Crude Oil prices are not expected to rise much next year, and will stay in the $40-50 a barrel range, putting additional pressure on the oil exporters in the Middle East, the International Monetary Fund (IMF) said on Monday in its update on the Regional Economic Outlook for the Middle East and Central Asia. In the near and medium term, oversupply and large inventories remain concerns, while demand continues to be dampened by low air traffic volume (despite recovering road traffic). Oil futures curves indicate that prices are expected to increase toward $48 a barrel in the medium term (from $41 for 2020), remaining some 25% below the 2019 average, the IMF noted.
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